operation management

| December 7, 2015

Add or not add a coffee machine to your bakery Cost:$20K Price per cup: $2.00 Cups sold per day: 25 Assumptions: A. 1. You are open 7 day per week 2. Raising or lowering the price has not effect on sales 3. Price of coffe, sugar, etc. and cups are included in the 20,000K price Questions: How long will it take to break even? B. Assumption 2 no longer applies. All other assumptions apply. How much do you have to charge within reason to make a 10% Return on Investment (ROI) ? C. Assumption 3. All of the assumptions in A apply, i.e. you cannot raise the price, how many cups of coffee do you have to sell to make 10% ROI? All answers must be set-up in an Excel as a Financial Model.

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